The Portuguese economy is growing fastest in 2022 – 5.8%, predicts Brussels. Country has ‘different recovery trajectory’ – Observer

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The Portuguese economy is expected to grow 5.8% in 2022 and 2.7% in 2023, according to new forecasts published on Monday by the European Commission. If these projections are confirmed, magazine topsthe national growth in 2022 will be the most expressive in all of Europe and more than double the European average – something that is due to a “different trajectory” of recovery. already the inflation should be 4.4%according to Brussels, below the European average of 6.1% and well above the 2.3% previously forecast.

New projections from the European Commission place Portugal as the European country with the strongest growth in 2022, with only Ireland (5.4%) recording a growth rate close to that of Portugal – note however that this Irish growth comes from from a year in 2021 in which gross domestic product (GDP) climbed 13.5%, compared to 4.9% in Portugal.

‘Portugal had a different trajectory’ in post-Covid recovery


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Asked directly about the forecast for Portugal, Commissioner Paolo Gentiloni confirmed that the European Commission has “good forecasts for growth and for the level of debt/GDP for Portugal, which in 2023 should reach 115%, which is below pre-pandemic levels.

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Regarding growth rates, which in 2022 could be the highest in Europe, Gentiloni pointed out that this effect is also due to the fact that Portugal had “a different trajectory” in the recovery post-pandemic. That is to say, it was not as strong in 2021, compared to other countries”, so it is recovering more now.

On the other hand, Paolo Gentiloni underlined the importance of “reopening tourism, for a country where foreign tourism plays a leading role”.

Already in February Brussels had improved Portuguese growth forecasts. The upward revision of projections for the national economy comes as the European Commission on Monday significantly reduce European growth forecasts.

If Brussels previously indicated a growth of 4.4% in the euro zone in 2022, this forecast has fallen to just over half: 2.7% in 2022. Also for the European Union as a whole, economic growth rates of 2.7% and 2.3% are expected in 2023.

The growth predicted by the European Commission for Portugal also exceeds the 4.9% forecast by the government in the state budget.

Still with regard to Portugal, Brussels expects the Unemployment rate drops to 5.7% in 2022 (compared to 6.6% at the end of 2021) and 5.5% in 2023. And the the public deficit will be less than 2% – 1.9% – in 2022then drops to 1% in 2023, predicts the European Commission.

The economy is accelerating, but “we must not fly in an arc”, warn economists

“Predictions for the European economy before the outbreak of war called for a prolonged and robust expansion. But Russian invasion of Ukraine brings new challengesprecisely at a time when the Union had recovered from the economic impacts of the pandemic,” says the European Commission, assuming that geopolitical tensions may not diminish over the projection horizon, i.e. until the end of 2023.

Brussels adds that “by causing upward pressure on commodity prices, further disruptions in supply chains and greater uncertainty”, the war in Ukraine “exacerbates previous blockages to growth, blockages which needed to be reduced. So with the war it’s unlikely to happen so the European Union is announcing a downward revision of growth outlook – the largest ever recorded – and an increase in inflation forecastswhich Brussels acknowledges is generalizing (i.e. extending beyond energy prices into the economy).

“Our economy is still far from a normal situation,” said European Commissioner Paolo Gentiloni, admitting that the forecast could be revised in the future, with a tendency to reflect weaker growth and higher inflation.

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